Kingbird Corporation purchased on January 1, 2020, as a held-to-maturity investment, $50,000 of the 10%, 6-year bonds of Harrison, Inc. for $54,693, which provides a 8% return. The bonds pay interest semiannually. Prepare Kingbird’s journal entries for (a) the purchase of the investment, and (b) the receipt of semiannual interest and premium amortization. Assume effective-interest amortization is used. (Round answers to 0 decimal places, e.g. 5,125. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Kingbird Corporation purchased on January 1, 2020, as a held-to-maturity investment, $50,000 of the 10%, 6-year bonds of Harrison, Inc. for $54,693, which provides a 8% return. The bonds pay interest semiannually. Prepare Kingbird’s journal entries for (a) the purchase of the investment, and (b) the receipt of semiannual interest and premium amortization. Assume effective-interest amortization is used. (Round answers to 0 decimal places, e.g. 5,125. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Kingbird Corporation purchased on January 1, 2020, as a held-to-maturity investment, $50,000 of the 10%, 6-year bonds of Harrison, Inc. for $54,693, which provides a 8% return. The bonds pay interest semiannually.
Prepare Kingbird’s journal entries for (a) the purchase of the investment, and (b) the receipt of semiannual interest and premium amortization. Assume effective-interest amortization is used. (Round answers to 0 decimal places, e.g. 5,125. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
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No.
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Account Titles and Explanation
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Debit
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Credit
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(a)
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enter an account title
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enter a debit amount
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enter a credit amount
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enter an account title
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enter a debit amount
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enter a credit amount
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|
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(b)
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enter an account title
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enter a debit amount
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enter a credit amount
|
|
enter an account title
|
enter a debit amount
|
enter a credit amount
|
|
|
enter an account title
|
enter a debit amount
|
enter a credit amount
|
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